Asia stock markets drop as traders digest China home prices, quake hits Japan, typhoon shuts HK

Stock markets in Asia traded lower across the board on Friday, while traders digested data showing China’s home prices climbed and as a typhoon shut down the Hong Kong market and caused casualties and destruction in the Philippines and an earthquake struck Japan.

In Japan, the Nikkei 225 closed down 50.91 points, or 0.30 percent, at 17,184.59, following reports of a magnitude 6.6 earthquake that struck western Japan. Reports said a tsunami warning was not issued.

The yen, considered a safe haven, climbed after the reports, trading as high as 103.75 against the dollar, compared with an earlier low of 104.20. As of 3:30 p.m. HK/SIN, the dollar/yen pair traded at 103.89.

Typhoon Haima, the strongest storm to hit the Philippines in three years, killed at least a dozen people and flooded vast tracts of rice and corn fields in the country, before heading toward Hong Kong, reported Reuters.

The PSE index in the Philippines was down 0.82 percent in late-afternoon trade.

Market operator Hong Kong Exchanges and Clearing (HKEX) said Friday’s trading sessions in the securities and derivatives markets were cancelled due to the typhoon.

Meanwhile, Chinese mainland markets finished mixed, with the Shanghai composite closing up 6.82 points, or 0.22 percent, at 3,091.28, while the Shenzhen composite slipped 7.82 points, 0.38 percent, to 2,052.56.

Government data showed property prices in China rose at the fastest pace on record in September, which prompted fears of a market bubble in the country. Reuters calculation of data from the National Bureau of Statistics showed property prices rose 11.2 percent on-year in September in 70 major cities.

Among mainland-listed property stocks, Vanke dropped 2.66 percent. Concerns about rising housing prices could spur authorities to take fresh cooling measures.

Elsewhere, Australia’s ASX 200 closed down 11.84 points, or 0.22 percent, at 5,430.30. The NZX 50 in New Zealand shed 15.38 points, or 0.22 percent, to close at 6,958.40. In South Korea, the Kospi finished lower by 7.60 points, or 0.37 percent, at 2,033.00.

In Japan, Mitsubishi Motors led gainers, rising 5.22 percent. On Thursday, Nissan announced it had completed the acquisition of a 34 percent controlling stake in Mitsubishi. Nissan chief Carlos Ghosn told CNBC on Friday that Nissan would support Mitsubishi’s recovery efforts from a major scandal earlier this year.

Nissan shares closed up 0.59 percent, while Honda gave up its nearly 0.70 percent gain to finish flat. Suzuki Motor climbed 2.01 percent. Toyota shares slipped 1.09 percent.

Japanese game maker Nintendo saw its shares drop 6.55 percent on Friday, despite revealing some details about its new gaming console, the Nintendo Switch, in a three-minute trailer on Thursday night local time. The console would be available from March 2017, according to the company.

Nomura analyst Junko Yamamura said in a Friday note the first impression of the product was that it was “solid.”

“The concept for the product is in line with our expectation that it will be a hybrid of a stationary console and a handheld device,” Yamamura said. “Software [for the console] will be sold in cartridges, which we think will have a favorable effect on pricing.”

In the currency market, the dollar index, which measures the greenback against a basket of currencies, climbed to 98.50 as of 3:39 p.m. HK/SIN, up from levels below 97.80 earlier in the week.

The dollar likely received a boost from growing expectations that the U.S. Federal Reserve might raise interest rates as early as December, according to Chris Weston, chief market strategist at spreadbettor IG.

Weston said in a morning note that market expectations “of a December hike have pushed up a touch to 67 percent. Next week’s U.S. third-quarter GDP could be a big catalyst for traders.”

Analysts said the dollar index was also boosted by a relatively weaker euro, which fell below $1.09 from levels above $1.10 the previous week, after the European Central Bank opted to keep interest rates unchanged in a widely expected decision, but also said it didn’t discuss extending its quantitative-easing program beyond the March 2017 expiration.

As of 3:39 p.m. HK/SIN, the euro/dollar pair traded at 1.0891.

ANZ’s Brian Martin said in a note that the U.S. election remains a potential source of volatility for the euro/dollar pair.

“Based on current opinion polls, the evidence from recent price action is that the foreign exchange market views a [Democratic Presidential Nominee Hillary] Clinton victory as dollar-positive,” said Martin.

Among other currency majors, the Australian dollar traded at $0.7645, after sliding from levels above $0.7700 on Thursday, as the September employment report sharply missed expectations.

The on-shore Chinese yuan traded at 6.7565 against the dollar in the afternoon, the mainland currency’s lowest levels since 2010.

Elsewhere, the Philippine peso fell to levels not seen since 2009 against the dollar, trading at 48.32 amid growing foreign investor concerns over President Rodrigo Duterte’s unfriendly remarks toward the U.S.

In a visit to China, Duterte suggested a possible break up of Philippines’ historic military and economic ties with the U.S. and a subsequent alliance with the world’s second-largest economy instead, which would likely impact the outlook of Asia’s geopolitical situation.

Oil prices were mixed in a slightly volatile Friday session, after dropping more than 2 percent in the Thursday session, with traders attributing the drop to profit-taking after hitting 15-month highs in the previous session.

Global benchmark Brent was flat at $51.40 as of 3:41 p.m. HK/SIN, after dropping 2.5 percent in the U.S. session. The November contract for U.S. crude futures ended down 2.3 percent at $50.43 before expiring. The new December front-month traded down 0.1 percent at $50.57.

In the U.S., the Dow Jones industrial average fell 40.27 points, or 0.22 percent, to 18,162.35, the S&P 500 index fell 2.95 points, or 0.14 percent, to end at 2,141.34 and the Nasdaq slipped 4.58 points, or 0.09 percent, to close at 5,241.83.

Source: CNBC